House Bill 2270 and Senate Bill 1156 Could Cost Virginia up to $1.4 billion in GDP

Undocumented immigrants in Virginia pay more than $189 million in state and local taxes and hold $4.3 billion a year in spending power that’s injected into the local economy

Date: February 13, 2019

RICHMOND, VA – As the Virginia State legislature considers two bills that would effectively force local law enforcement to become federal immigration agents, new research from New American Economy (NAE) highlights the negative impact this legislation could have on the Virginia state economy. House Bill 2270 and Senate Bill 1156 propose banning policies that limit local cooperation and information-sharing with federal authorities on immigration matters. These bills would create a hostile environment in Virginia potentially causing contributing members of the immigrant community to leave the state as a result, as they did in Arizona when the Arizona Legislature enacted similarly restrictive legislation, SB 1070, in 2010.

“Immigrants are active contributors to Virginia’s workforce and economy,” said John Feinblatt, President of New American Economy. “If passed, these bills could potentially inflict more than a billion dollars in damage and threaten key industries like construction and food services.”

This brief models what the economic costs would be if HB 2270 and SB 1156 were signed into law and 10 percent of the state’s undocumented population were to leave as a result. To be conservative, it also models the impact if Virginia experienced just half the immigrant exodus – five percent. In either of the two cases modeled, the state would risk losing millions of dollars in taxes and GDP in just one year.

If 10 percent of undocumented immigrants leave Virginia, NAE’s research finds that the state will lose $22.3 million in federal taxes and $15.5 million in state and local taxes. This 10 percent includes an estimated 15,965 employed workers, whose departure will reflect a direct $547.3 million loss in earnings. State-wide, business owners in industries such as construction, restaurant, and food services, and building services will be greatly affected. In total, Virginia would stand to lose more than $1.4 billion in Gross Domestic Product (GDP).

If five percent of undocumented immigrants leave Virginia, NAE’s research finds that the state will lose more than $11.1 million in federal taxes and more than $7.7 million in state and local taxes. This five percent includes an estimated 7,982 employed workers, whose departure will reflect a $273.6 million loss in wage earnings. State-wide, business owners in industries such as construction, restaurant, and food services, and building services will be greatly affected. In total, Virginia would stand to lose $717.8 million in Gross Domestic Product (GDP).

The economic loss as it relates to jobs, earnings, taxes, and GDP is proportional to the number of undocumented immigrant workers that would leave the state. For instance, if 20 percent of undocumented immigrants leave Virginia, the economic cost will be twice the above numbers.

About NAE

New American Economy is a bipartisan research and advocacy organization fighting for smart federal, state, and local immigration policies that help grow our economy and create jobs for all Americans.
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